Friday, January 4, 2013

Morning Market Analysis

The Chinese market appears to have bottomed at the beginning of December and has been making a sharp rebound since. Prices have advanced through resistance at the 2140 level and are now moving through resistance established in late March/early April. Notice the buy signal from the MACD and strengthening price picture from the RSI. Finally, prices are now through the shorter EMAs, and are now moving towards the 200 week EMA.

The long end of the treasury market is very interesting. The daily chart (top chart) shows that prices are near six month lows. We see a big gap lower on Wednesday and a long candle yesterday, both on very high volume. The underlying technicals are very weak, with a declining MACD and CMF and shorter EMAs dropping. Prices are now below the 200 day EMA. On the weekly chart, notice that prices are at very important long-term technical levels; a move below the 116/117 level could presage a strong move lower.

While the dollar had a strong advance yesterday, the important issue on this chart is that prices have strong support at the 21.6 level.

The oil market is in the middle of a nearly one month rally. It started a little after December 10. Prices have now moved through all the EMAs (including the 200), followed by bullish price action from the shorter EMAs with the 10 and 20 crossing over the 50 right before Christmas. The MACD is rising, although the CMF is a little weak. Prices are now at important technical levels established at the beginning of October.